Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 31, 2017 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | Community Healthcare Trust Inc | |
Entity Central Index Key | 1,631,569 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 18,008,663 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Real estate properties | ||
Land and land improvements | $ 37,277 | $ 29,884 |
Buildings, improvements, and lease intangibles | 281,408 | 222,755 |
Personal property | 109 | 97 |
Total real estate properties | 318,794 | 252,736 |
Less accumulated depreciation | (26,610) | (18,404) |
Total real estate properties, net | 292,184 | 234,332 |
Cash and cash equivalents | 831 | 1,568 |
Mortgage note receivable, net | 10,518 | 10,786 |
Other assets, net | 5,722 | 4,843 |
Total assets | 309,255 | 251,529 |
Liabilities | ||
Debt, net | 117,251 | 51,000 |
Accounts payable and accrued liabilities | 3,057 | 3,541 |
Other liabilities | 3,533 | 2,981 |
Total liabilities | 123,841 | 57,522 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Preferred stock, $0.01 par value; 50,000,000 shares authorized; none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value; 450,000,000 shares authorized; 13,121,163 and 12,988,482 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 131 | 130 |
Additional paid-in capital | 214,975 | 214,323 |
Cumulative net income | 2,644 | 1,265 |
Accumulated other comprehensive loss | (436) | 0 |
Cumulative dividends | (31,900) | (21,711) |
Total stockholders’ equity | 185,414 | 194,007 |
Total liabilities and stockholders' equity | $ 309,255 | $ 251,529 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 450,000,000 | 450,000,000 |
Common Stock, shares issued | 13,121,163 | 12,988,482 |
Common Stock, shares outstanding | 13,121,163 | 12,988,482 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
REVENUES | ||||
Rental income | $ 7,338 | $ 4,530 | $ 13,956 | $ 8,203 |
Tenant reimbursements | 1,334 | 1,105 | 2,462 | 2,062 |
Mortgage interest | 258 | 561 | 519 | 1,097 |
Revenues | 8,930 | 6,196 | 16,937 | 11,362 |
EXPENSES | ||||
Property operating | 2,140 | 1,228 | 3,878 | 2,277 |
General and administrative | 835 | 895 | 1,605 | 1,701 |
Depreciation and amortization | 4,281 | 3,332 | 8,205 | 6,147 |
Bad debts | 0 | 30 | 67 | 30 |
Expenses | 7,256 | 5,485 | 13,755 | 10,155 |
OTHER INCOME (EXPENSE) | ||||
Interest expense | (1,209) | (222) | (1,806) | (602) |
Interest and other income, net | 1 | 19 | 3 | 19 |
Other Income (Expense) | (1,208) | (203) | (1,803) | (583) |
NET INCOME | $ 466 | $ 508 | $ 1,379 | $ 624 |
NET INCOME PER COMMON SHARE: | ||||
Net income per common share – Basic (in dollars per share) | $ 0.04 | $ 0.04 | $ 0.11 | $ 0.06 |
Net income per common share – Diluted (in dollars per share) | $ 0.04 | $ 0.04 | $ 0.11 | $ 0.06 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-BASIC | 12,686,183 | 12,038,381 | 12,686,183 | 9,774,782 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-DILUTED | 12,815,605 | 12,064,839 | 12,840,730 | 9,834,050 |
DIVIDENDS DECLARED, PER COMMON SHARE, DURING THE PERIOD (in dollars per share) | $ 0.39 | $ 0.38 | $ 0.7775 | $ 0.7575 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
NET INCOME | $ 466 | $ 508 | $ 1,379 | $ 624 |
Other comprehensive income (loss): | ||||
Decrease in fair value of cash flow hedges | (440) | 0 | (598) | 0 |
Reclassification for amounts recognized as interest expense | 156 | 0 | 162 | 0 |
Total other comprehensive loss | (284) | 0 | (436) | 0 |
COMPREHENSIVE INCOME | $ 182 | $ 508 | $ 943 | $ 624 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Stockholders' Equity - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands | Total | Preferred Stock [Member] | Common Stock [Member] | Additional Paid in Capital [Member] | Cumulative Net Income [Member] | Accumulated Other Comprehensive Loss [Member] | Cumulative Dividends [Member] |
Beginning Balance at Dec. 31, 2016 | $ 194,007 | $ 0 | $ 130 | $ 214,323 | $ 1,265 | $ 0 | $ (21,711) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation | 653 | 1 | 652 | ||||
Unrecognized loss on cash flow hedges | (598) | (598) | |||||
Reclassification adjustment for losses included in net income (interest expense) | 162 | 162 | |||||
Net income | 1,379 | 1,379 | |||||
Dividends to common stockholders ($0.7775 per share) | (10,189) | (10,189) | |||||
Ending Balance at Jun. 30, 2017 | $ 185,414 | $ 0 | $ 131 | $ 214,975 | $ 2,644 | $ (436) | $ (31,900) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) | 6 Months Ended |
Jun. 30, 2017$ / shares | |
Cumulative Dividends [Member] | |
Dividends to common stockholders, per share (in dollars per share) | $ 0.7775 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
OPERATING ACTIVITIES | ||
Net income | $ 1,379 | $ 624 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 8,389 | 6,191 |
Stock-based compensation | 653 | 262 |
Straight-line rent receivable | (544) | (234) |
Straight-line rent liability | 9 | 0 |
Provision for bad debts, net of recoveries | 67 | (30) |
Reduction in contingent purchase price | (5) | (481) |
Changes in operating assets and liabilities: | ||
Other assets | (641) | (815) |
Accounts payable and accrued liabilities | (512) | 1,638 |
Other liabilities | 11 | (219) |
Net cash provided by operating activities | 8,806 | 6,936 |
INVESTING ACTIVITIES | ||
Acquisitions of real estate | (65,165) | (46,233) |
Funding of mortgage notes receivable | 0 | (12,406) |
Proceeds from the repayment of notes receivable | 294 | 0 |
Capital expenditures on existing real estate properties | (306) | (706) |
Net cash used in investing activities | (65,177) | (59,345) |
FINANCING ACTIVITIES | ||
Net borrowings (repayments) on revolving credit facility | 7,000 | (17,000) |
Term loan borrowings | 60,000 | 0 |
Dividends paid | (10,189) | (7,814) |
Net proceeds from issuance of common stock | 0 | 86,804 |
Equity issuance costs | 0 | (679) |
Debt issuance costs | (784) | 0 |
Settlement of contingent purchase price | (393) | 0 |
Net cash provided by financing activities | 55,634 | 61,311 |
Increase (decrease) in cash and cash equivalents | (737) | 8,902 |
Cash and cash equivalents, beginning of period | 1,568 | 2,018 |
Cash and cash equivalents, end of period | 831 | 10,920 |
Supplemental Cash Flow Information: | ||
Interest paid | 1,665 | 474 |
Invoices accrued for construction, tenant improvement and other capitalized costs | 3 | 80 |
Reclassification between accounts and notes receivable | 476 | 0 |
Conversion of mortgage note upon acquisition of real estate property | 0 | 12,500 |
Decrease in fair value of cash flow hedges | $ (598) | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Business Overview Community Healthcare Trust Incorporated (the ‘‘Company’’, ‘‘we’’, ‘‘our’’) was organized in the State of Maryland on March 28, 2014. The Company is a fully-integrated healthcare real estate company that owns and acquires real estate properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers in non-urban markets. The Company conducts its business through an UPREIT structure in which its properties are owned by its operating partnership (the "OP"), either directly or through subsidiaries. The Company is the sole general partner of the OP, owning 100% of the OP units. As of June 30, 2017 , the Company had investments of approximately $329.3 million in 78 real estate properties, including a mortgage note, located in 25 states, totaling approximately 1.7 million square feet in the aggregate. Basis of Presentation The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. This interim financial information should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. This interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2017 . Principles of Consolidation Our Condensed Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries, and may also include joint ventures, partnerships and variable interest entities, or VIEs, where the Company controls the operating activities. All material intercompany accounts and transactions have been eliminated. Jumpstart Our Business Startups Act of 2012 The Company has elected the "emerging growth company" status as permitted under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. The Company elected to "opt out" of the provision allowed under the JOBS Act to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. As a result, we must comply with new or revised accounting standards as required when they are adopted. Our decision to opt out of the extended transition period under the JOBS Act is irrevocable. Use of Estimates in the Condensed Consolidated Financial Statements Preparation of the Condensed Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results may materially differ from those estimates. Segment Reporting The Company acquires and owns healthcare-related real estate properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers in non-urban markets. The Company is managed as one reporting unit, rather than multiple reporting units, for internal reporting purposes and for internal decision-making. Therefore, the Company discloses its operating results in a single segment. Cash and Cash Equivalents Cash and cash equivalents includes short-term investments with original maturities of three months or less when purchased. Accounting for Real Estate Property Acquisitions Real estate property acquisitions are accounted for as business combinations or asset purchases. An acquisition accounted for as a business combination is recorded at fair value and related closing costs are expensed. An acquisition accounted for as an asset purchase is recorded at its purchase price, inclusive of acquisition costs, which is allocated among the acquired assets and assumed liabilities based upon their relative fair values at the date of acquisition. Upon the adoption of Accounting Standards Update ("ASU") No, 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , on January 1, 2017, the Company expects that substantially all of its acquisitions will be accounted for as asset acquisitions. The allocation of real estate property acquisitions may include land, building and improvements, personal property, and identified intangible assets and liabilities (consisting of above- and below-market leases, in-place leases, and tenant relationships) based on the evaluation of information and estimates available at that date, and we allocate the purchase price based on these assessments. We make estimates of the acquisition date fair value of the tangible and intangible assets and acquired liabilities using information obtained from multiple sources as a result of pre-acquisition due diligence, tax records, and other sources. Based on these estimates, we recognize the acquired assets and liabilities at their estimated fair values. We expense transaction costs associated with business combinations in the period incurred. The fair value of tangible property assets acquired considers the value of the property as if vacant determined by comparable sales and other relevant data. The determination of fair value involves the use of significant judgment and estimation. We value land based on various inputs, which may include internal analysis of recently acquired properties, existing comparable properties within our portfolio, or third party appraisals or valuations based on comparable sales. In recognizing identified intangible assets and liabilities of an acquired property, the value of above- or below-market leases is estimated based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between contractual amounts to be received pursuant to the leases and management’s estimate of market lease rates measured over a period equal to the estimated remaining term of the lease. In the case of a below-market lease, the Company would also evaluate any renewal options associated with that lease to determine if the intangible should include those periods. The capitalized above-market or below-market lease intangibles are amortized as a reduction from or an addition to rental income over the estimated remaining term of the respective leases. In determining the value of in-place leases and tenant relationships, management considers current market conditions and costs to execute similar leases in arriving at an estimate of the carrying costs during the expected lease-up period from vacant to existing occupancy. In estimating carrying costs, management includes real estate taxes, insurance, other property operating expenses, estimates of lost rental revenue during the expected lease-up periods, and costs to execute similar leases, including leasing commissions. The values assigned to in-place leases and tenant relationships are amortized over the estimated remaining term of the lease. If a lease terminates prior to its scheduled expiration, all unamortized costs related to that lease are written off. Depreciation and amortization of real estate assets and liabilities in place as of June 30, 2017 , is recognized on a straight-line basis over the estimated useful life of the asset. The estimated useful lives at June 30, 2017 are as follows: Land improvements 3 - 15 years Buildings 20 - 40 years Building improvements 3.0 - 39.8 years Tenant improvements 2.3 - 6.9 years Lease intangibles 1.4 - 13.7 years Personal property 3 -10 years Asset Impairments The Company assesses the potential for impairment of identifiable, definite-lived, intangible assets and long-lived assets, including real estate properties, whenever events occur or a change in circumstances indicates that the carrying value might not be fully recoverable. Indicators of impairment may include significant under-performance of an asset relative to historical or expected operating results; significant changes in the Company’s use of assets or the strategy for its overall business; plans to sell an asset before its depreciable life has ended; the expiration of a significant portion of leases in a property; or significant negative economic trends or negative industry trends for the Company or its operators. In addition, the Company’s review for possible impairment may include those assets subject to purchase options and those impacted by casualties, such as tornadoes and hurricanes. If management determines that the carrying value of the Company’s assets may not be fully recoverable based on the existence of any of the factors above, or others, management would measure and record an impairment charge based on the estimated fair value of the property or the estimated fair value less costs to sell the property. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. In calculating fair value, a company must maximize the use of observable market inputs, minimize the use of unobservable market inputs and disclose in the form of an outlined hierarchy the details of such fair value measurements. A hierarchy of valuation techniques is defined to determine whether the inputs to a fair value measurement are considered to be observable or unobservable in a marketplace. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. This hierarchy requires the use of observable market data when available. These inputs have created the following fair value hierarchy: • Level 1 – quoted prices for identical instruments in active markets. • Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3 – fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Our interest rate swaps are valued in the market using discounted cash flow techniques. These techniques incorporate Level 1 and Level 2 inputs. The market inputs are utilized in the discounted cash flow calculation considering the instrument’s term, notional amount, discount rate and credit risk. Significant inputs to the derivative valuation model for interest rate swaps are observable in active markets and are classified as Level 2 in the hierarchy. Lease Accounting We, as lessor, make a determination with respect to each of our leases whether they should be accounted for as operating leases or capital leases. The classification criteria is based on estimates regarding the fair value of the leased facilities, minimum lease payments, effective cost of funds, the economic useful life of the facilities, the existence of a bargain purchase option, and certain other terms in the lease agreements. We believe all of our leases meet the accounting criteria to be accounted for as operating leases. Payments received under operating leases are accounted for in the Condensed Consolidated Statements of Income as rental revenue for actual cash rent collected plus or minus straight-line adjustments such as lease escalators. Assets subject to operating leases are reported as real estate investments in the Condensed Consolidated Balance Sheets. Substantially all of our leases contain fixed or formula-based rent escalators. To the extent that the escalator increases are tied to a fixed index or rate, lease payments are accounted for on a straight-line basis over the life of the lease. Revenue Recognition The Company recognizes rental revenue when it is realized or realizable and earned. There are four criteria that must all be met before a Company may recognize revenue, including persuasive evidence that an arrangement exists, delivery has occurred or services have been rendered (i.e., the tenant has taken possession of and controls the physical use of the leased asset), the price has been fixed or is determinable, and collectability is reasonably assured. The Company derives most of its revenues from its real estate property and mortgage note portfolio. The Company's rental and mortgage interest income is recognized based on contractual arrangements with its tenants and borrowers. Rental income is recognized as earned over the life of the lease agreement on a straight-line basis. Recognizing rental revenue on a straight-line basis for leases may result in recognizing revenue in amounts more or less than amounts currently due from tenants. If management determines that the collectability of straight-line rents is not reasonably assured, the amount of future revenue recognized may be limited to amounts contractually owed and, where appropriate, establish an allowance for estimated losses. Straight-line rent included in rental income was approximately $270,000 and $138,000 , respectively, for the three months ended June 30, 2017 and 2016 and was $535,000 and $234,000 , respectively, for the six months ended June 30, 2017 and 2016 . Mortgage interest income is recognized based on the interest rates, maturity dates and amortization periods set forth within each note agreement. Fees received related to its mortgage notes are amortized to mortgage interest income on a straight-line basis which approximates amortization under the effective interest method. Income received but not yet earned is deferred until such time it is earned. Deferred revenue, included in other liabilities, was approximately $ 1.0 million and $0.8 million , respectively, at June 30, 2017 and December 31, 2016 . Allowance for Doubtful Accounts and Credit Losses Accounts Receivable Management monitors the aging and collectability of its accounts receivable balances on an ongoing basis. Whenever deterioration in the timeliness of payment from a tenant is noted, management investigates and determines the reason or reasons for the delay. Considering all information gathered, management’s judgment is exercised in determining whether a receivable is potentially uncollectible and, if so, how much or what percentage may be uncollectible. Among the factors management considers in determining collectability are: the type of contractual arrangement under which the receivable was recorded (e.g., triple net lease, gross lease, or other type of agreement); the tenant’s reason for slow payment; industry influences under which the tenant operates; evidence of willingness and ability of the tenant to pay the receivable; credit-worthiness of the tenant; collateral, security deposit, letters of credit or other monies held as security; tenant’s historical payment pattern; other contractual agreements between the tenant and the Company; relationship between the tenant and the Company; the state in which the tenant operates; and the existence of a guarantor and the willingness and ability of the guarantor to pay the receivable. Considering these factors and others, management concludes whether all or some of the aged receivable balance is likely uncollectible. Upon determining that some portion of the receivable is likely uncollectible, the Company will record a provision for bad debts for the amount it expects will be uncollectible. When efforts to collect a receivable are exhausted, the receivable amount is charged off against the allowance. At June 30, 2017 and December 31, 2016 , the Company had an allowance for bad debts of approximately $221,000 and $154,000 , respectively. Mortgage Note Receivable The Company evaluates collectability of mortgage notes and records allowances as necessary. A note is impaired when it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan as scheduled, including both contractual interest and principal payments. This assessment also includes an evaluation of the loan collateral. If a mortgage loan becomes past due, the Company will review the specific circumstances and may discontinue the accrual of interest on the loan. The loan is not returned to accrual status until the debtor has demonstrated the ability to continue debt service in accordance with the contractual terms. Loans placed on non-accrual status will be accounted for on a cash basis, in which income is recognized only upon the receipt of cash, or on a cost-recovery basis, in which all cash receipts reduce the carrying value of the loan, based on the Company's expectation of future collectability. The Company had one mortgage note receivable outstanding as of June 30, 2017 and December 31, 2016 with a principal balance of $10.6 million and $10.9 million , respectively. Principal and interest are due monthly based on a 20 -year amortization schedule, with a balloon payment due at maturity on September 30, 2026 . The borrower and several related entities filed for voluntary bankruptcy on June 23, 2017. As of June 30, 2017, the net balance on the mortgage note was approximately $10.5 million and the borrower was current on all obligations to the Company. The Company has evaluated the collectability of the mortgage note, and based on information currently available, believes the note to be collectible. The Company will continue to evaluate the collectability of the note as additional information becomes available. The Company may receive loan or commitment fees upon the funding of a mortgage note. The Company will amortize those fees into income over the life of the mortgage note on a straight line basis and will reflect the mortgage note, net of the unamortized fees, on its Consolidated Balance Sheet. Stock-Based Compensation The Company's 2014 Incentive Plan, as amended, or our 2014 Incentive Plan, is intended to attract and retain qualified persons upon whom, in large measure, our sustained progress, growth and profitability depend, to motivate the participants to achieve long-term company goals and to more closely align the participants’ interests with those of our other stockholders by providing them with a proprietary interest in our growth and performance. The three distinct programs under the 2014 Incentive Plan are the Amended and Restated Alignment of Interest Program , the Amended and Restated Executive Officer Incentive Program and the Non-Executive Officer Incentive Program . Our executive officers, officers, employees, consultants and non-employee directors are eligible to participate in the 2014 Incentive Plan. The 2014 Incentive Plan increases, on an annual basis, the number of shares of common stock available for issuance to an amount equal to 7% of the total number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding year. The 2014 Incentive Plan is administered by the Company’s compensation committee, which interprets the 2014 Incentive Plan and has broad discretion to select the eligible persons to whom awards will be granted, as well as the type, size and terms and conditions of each award, including the number of shares subject to awards and the expiration date of, and the vesting schedule or other restrictions (including, without limitation, restrictive covenants) applicable to, awards. The Company recognizes share-based payments to its directors and employees in its Consolidated Statements of Income on a straight-line basis over the requisite service period based on the fair value of the award on the measurement date. Intangible Assets Intangible assets with indefinite lives are not amortized, but are tested at least annually for impairment. Intangible assets with finite lives are amortized over their respective lives to their estimated residual values and are reviewed for impairment only when impairment indicators are present. Identifiable intangible assets of the Company are generally comprised of in-place lease intangible assets, above- and below-market lease intangibles and deferred financing costs. In-place lease intangible assets are amortized on a straight-line basis over the applicable lives of the assets. Deferred financing costs are amortized to interest expense over the term of the related credit facility or other debt instrument using the straight-line method, which approximates the effective interest method. Contingent Liabilities From time to time, the Company may be subject to loss contingencies arising from legal proceedings and similar matters. Additionally, while the Company maintains comprehensive liability and property insurance with respect to each of its properties, the Company may be exposed to unforeseen losses related to uninsured or under-insured damages. Management will monitor any matter that may present a contingent liability, and, on a quarterly basis, will review any reserves and accruals relating to the liabilities, adjusting provisions as necessary in view of changes in available information. Liabilities for contingencies are first recorded when a loss is determined to be both probable and can be reasonably estimated. Changes in estimates regarding the exposure to a contingent loss will be reflected as adjustments to the related liability in the periods when they occur and will be disclosed in the notes to the Condensed Consolidated Financial Statements. On occasion, the Company may also have acquisitions which include contingent consideration. In 2016, the Company acquired a medical office building and concurrently recorded the fair value of contingent purchase price of approximately $0.5 million . Subsequently, management monitored this contingency and adjusted its liability to its estimated fair value on a quarterly basis, offsetting property operating expense in the periods when they occurred. In April 2017, the Company paid approximately $0.4 million in settlement of this contingent liability. Income Taxes The Company has elected to be taxed as a real estate investment trust ("REIT"), as defined under the Internal Revenue Code of 1986, as amended (the "Code"). We have also elected for one of our subsidiaries to be treated as a taxable REIT subsidiary ("TRS"), which is subject to federal and state income taxes. No provision has been made for federal income taxes for the REIT; however, the Company has made provisions for federal and state income taxes for the TRS. The Company intends at all times to qualify as a REIT under Sections 856 and 860 of the Code. The Company must distribute at least 90% per annum of its REIT taxable income to its stockholders (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with generally accepted accounting principles) and meet other requirements to continue to qualify as a real estate investment trust. The Company classifies interest and penalties related to uncertain tax positions, if any, in the Condensed Consolidated Statements of Income as a component of general and administrative expenses. Sales and Use Taxes The Company must pay sales and use taxes to certain state tax authorities based on rent collected from tenants in properties located in those states. The Company is generally reimbursed for those taxes by those tenants. The Company accounts for the payments to the taxing authority and subsequent reimbursement from the tenant on a net basis, included in tenant reimbursement revenue on the Company’s Condensed Consolidated Statements of Income. Concentration of Credit Risks Our credit risks primarily relate to cash and cash equivalents, our mortgage note receivable and our interest rate swaps, which are discussed below. Cash and cash equivalents are primarily held in bank accounts and overnight investments. We maintain our bank deposit accounts with large financial institutions in amounts that often exceed federally-insured limits. We have not experienced any losses in such accounts. Derivative Financial Instruments In the normal course of business, we are subject to risk from adverse fluctuations in interest rates. We have chosen to manage this risk through the use of derivative financial instruments, or interest rate swaps. Counterparties to these contracts are major financial institutions. We are exposed to credit loss in the event of nonperformance by these counterparties. We do not use derivative instruments for trading or speculative purposes. Our objective in managing exposure to market risk is to limit the impact on cash flows. To qualify for hedge accounting, our interest rate swaps must effectively reduce the risk exposure that they are designed to hedge. In addition, at inception of a qualifying cash flow hedging relationship, the underlying transaction or transactions must be, and be expected to remain, probable of occurring in accordance with our related assertions. All of our hedges are cash flow hedges and are recognized at their fair value in the Condensed Consolidated Balance Sheets. Changes in the fair value of the effective portion of the derivatives are recognized in accumulated other comprehensive loss, whereas the change in fair value of the ineffective portion is recognized in earnings in interest expense. Earnings per Share Basic earnings per common share is calculated using weighted average shares outstanding less issued and outstanding non-vested shares of common stock. Diluted earnings per common share is calculated using weighted average shares outstanding plus the dilutive effect of the non-vested shares of common stock using the treasury stock method and the average stock price during the period. New Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-02, Leases . This standard requires a lessor to classify leases as either sales-type, finance or operating. A lease will be treated as a sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing. If the lessor doesn’t convey risks and rewards or control, an operating lease results. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessors for sales-type, direct financing, and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are not currently a lessee in any material lease arrangements and the amendments in ASU 2016-02 do not significantly change the current lessor accounting model; therefore, we do not currently believe that the adoption of this standard will have a material impact on our Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, as amended by ASU No. 2015-14, Revenue from Contracts with Customers , a comprehensive new revenue recognition standard that supersedes most existing revenue recognition guidance, including sales of real estate. This standard's core principle is that a company will recognize revenue when it transfers goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods and services. However, leasing contracts, representing the major source of the Company's revenues, are not within the scope of the new standard and will continue to be accounted for under other standards. This new standard is effective for the Company for annual and interim periods beginning on January 1, 2018 with early adoption permitted in 2017. The Company is currently in the early stages of evaluating the impact that ASU 2014-09 will have on revenues and disclosures generated from activities other than leasing, such as non-lease components and mortgages. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses , which changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, companies will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, companies will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than as reductions in the amortized cost of the securities. Companies will have to disclose significantly more information, including information they use to track credit quality by year of origination for most financing receivables. Companies will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. This standard is effective for the Company on January 1, 2020 with early adoption permitted. The Company is in the initial stage of evaluating the impact of this new standard on its notes and trade receivables. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments, which clarifies or provides guidance relating to eight specific cash flow classification issues. The standard should be applied retrospectively for each period presented, as appropriate. This new standard is effective for the Company on January 1, 2018 with early adoption permitted. Of the eight areas addressed, the Company expects that its presentation on its statements of cash flows could be impacted relating to cash payments of contingent consideration or settlement of insurance claims, based on historical transactions. In the future, however, the impact of this new guidance will depend on future transactions, though the impact will only be related to the classification of those items on the statement of cash flows and will not impact the Company's cash flows or its results of operations. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718) , which provides guidance about which changes in the terms or conditions of a share-based payment award require a company to apply modification accounting in Topic 718. Under ASU No. 2017-09, a company will generally be required to apply modification accounting unless the fair value or intrinsic value of the modified award, the vesting conditions of the modified award, and the classification of the modified award as equity or a liability are the same as the original award immediately before the award is modified. This standard is effective for the Company on January 1, 2018 with early adoption permitted. The Company does not believe the adoption of this standard will have an impact on its results of operations, but could impact the accounting on future modifications of share-based awards. |
Real Estate Investments
Real Estate Investments | 6 Months Ended |
Jun. 30, 2017 | |
Real Estate [Abstract] | |
Real Estate Investments | Real Estate Investments At June 30, 2017 , the Company had investments of approximately $329.3 million in 78 real estate properties, including a mortgage note. The following table summarizes the Company's real estate investments. (Dollars in thousands) Number of Facilities Land and Land Improvements Buildings, Improvements, and Lease Intangibles Personal Property Total Accumulated Depreciation Medical office buildings: Florida 4 $ 4,138 $ 23,777 $ — $ 27,915 $ 1,847 Ohio 5 3,167 23,516 — 26,683 2,394 Texas 3 3,096 12,172 — 15,268 2,615 Kansas 2 1,379 10,497 — 11,876 2,205 Iowa 1 2,241 8,979 — 11,220 621 Illinois 1 821 8,760 — 9,581 1,213 Virginia 1 369 4,649 — 5,018 78 Other states 13 3,272 22,692 — 25,964 1,665 30 18,483 115,042 — 133,525 12,638 Physician clinics: Kansas 3 1,616 10,899 — 12,515 1,579 Florida 3 — 5,950 — 5,950 413 Illinois 1 1,891 3,134 — 5,025 5 Other states 9 3,195 18,459 — 21,654 2,401 16 6,702 38,442 — 45,144 4,398 Surgical centers and hospitals: Louisiana 1 1,683 21,353 — 23,036 311 Indiana 1 523 14,405 — 14,928 15 Michigan 2 629 8,266 — 8,895 1,467 Illinois 1 2,171 5,410 — 7,581 527 Florida 1 271 7,004 — 7,275 4 Arizona 2 576 5,389 — 5,965 748 Other states 5 1,555 11,001 — 12,556 2,463 13 7,408 72,828 — 80,236 5,535 Specialty centers: Alabama 3 415 4,417 — 4,832 1,045 Nevada 1 276 4,402 — 4,678 92 Kentucky 1 193 3,432 — 3,625 651 Other states 10 1,716 15,227 — 16,943 1,532 15 2,600 27,478 — 30,078 3,320 Behavioral facilities: Illinois 1 1,300 18,803 — 20,103 509 Ohio 1 514 4,153 — 4,667 26 Indiana 1 270 2,651 — 2,921 111 3 2,084 25,607 — 27,691 646 Corporate property — — 2,011 109 2,120 73 Total owned properties 77 $ 37,277 $ 281,408 $ 109 $ 318,794 $ 26,610 Mortgage note receivable, net 1 — — — 10,518 — Total real estate investments 78 $ 37,277 $ 281,408 $ 109 $ 329,312 $ 26,610 |
Real Estate Leases
Real Estate Leases | 6 Months Ended |
Jun. 30, 2017 | |
Leases [Abstract] | |
Real Estate Leases | Real Estate Leases The Company’s properties are generally leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2033 . The Company’s leases generally require the lessee to pay minimum rent, with fixed rent renewal terms or increases based on a Consumer Price Index and additional rent, which may include taxes (including property tax), insurance, maintenance and other operating costs associated with the leased property. Future minimum lease payments under the non-cancelable operating leases due the Company for the years ending December 31, as of June 30, 2017 , are as follows (in thousands): 2017 $ 15,082 2018 27,225 2019 24,065 2020 21,403 2021 18,518 2022 and thereafter 103,039 $ 209,332 |
Real Estate Acquisitions
Real Estate Acquisitions | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Real Estate Acquisitions | Real Estate Acquisitions Property Acquisitions During the second quarter of 2017, the Company acquired 10 real estate properties totaling approximately 203,000 square feet for an aggregate purchase price of approximately $36.2 million , including cash consideration of approximately $35.9 million . Upon acquisition, the properties were 100% leased in the aggregate with lease expirations ranging from 2019 through 2032 . Amounts reflected in revenues and net income for the three months ended June 30, 2017 for these properties was approximately $0.2 million and $0.1 million , respectively. Transaction costs totaling approximately $0.3 million related to these acquisitions were capitalized in the period as part of the real estate assets. During the first quarter of 2017, the Company acquired 10 real estate properties totaling approximately 145,000 square feet for an aggregate purchase price of approximately $28.5 million , including cash consideration of approximately $28.4 million . Upon acquisition, the properties were 95.2% leased in the aggregate with lease expirations ranging from 2018 through 2032 . Amounts reflected in revenues and net income for the six months ended June 30, 2017 for these properties was approximately $1.1 million and $0.3 million , respectively. Transaction costs totaling approximately $0.4 million related to these acquisitions were capitalized in the period as part of the real estate assets. During the first quarter of 2017, the Company also acquired a property, adjacent to its corporate office, for a cash purchase price of approximately $0.9 million . The property is currently leased to a tenant but the Company intends to use the property for future expansion of its corporate office. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed in the property acquisitions for the first six months of 2017. Estimated Fair Value Estimated Useful Life (In thousands) (In years) Land $ 7,264 Buildings 49,506 20 - 40 Intangibles: In place lease intangibles 8,982 1.4 - 8.9 Total intangibles 8,982 Accounts receivable and other assets assumed 16 Accounts payable, accrued liabilities and other liabilities assumed (1) (332 ) Prorated rent, interest and operating expense reimbursement amounts collected (271 ) Total cash consideration $ 65,165 (1) Includes security deposits received. |
Debt, net
Debt, net | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt, net | Debt, net The table below details the Company's debt as of June 30, 2017 and December 31, 2016 . Balance as of (Dollars in thousands) June 30, 2017 December 31, 2016 Maturity Dates Revolving Credit Facility $ 58,000 $ 51,000 8/19 5-Year Term Loan, net 29,628 — 3/22 7-Year Term Loan, net 29,623 — 3/24 $ 117,251 $ 51,000 On March 29, 2017 , we entered into a second amended and restated Credit Facility (as amended and restated, the "Credit Facility"). The Credit Facility is by and among Community Healthcare OP, LP, the Company, the Lenders from time to time party thereto, and SunTrust Bank, as Administrative Agent. The Company’s material subsidiaries are guarantors of the obligations under the Credit Facility. The Credit Facility provides for a $150.0 million revolving credit facility (the "Revolving Credit Facility") and $100.0 million in term loans (the "Term Loans"). The Credit Facility, through the accordion feature, allows borrowings up to a total of $450.0 million , including the ability to add and fund additional term loans. The Revolving Credit Facility matures on August 9, 2019 and includes two 12-month options to extend the maturity date of the facility, subject to the satisfaction of certain conditions. The Term Loans include a five -year term loan facility in the aggregate principal amount of $50.0 million (the "5-Year Term Loan") which matures on March 29, 2022 and a seven -year term loan facility in the aggregate principal amount of $50.0 million (the "7-Year Term Loan") which matures on March 29, 2024 . Upon closing of the Credit Facility on March 29, 2017, the Company borrowed $30.0 million under each of the 5-Year Term Loan and the 7-Year Term Loan. Each of the 5-Year Term Loan and 7-Year Term Loan has a delayed draw feature that is available in up to three draws within 15 months from March 29, 2017, subject to a minimum draw of $10.0 million and pro forma compliance. The Company incurred approximately $784,000 in fees and other costs upon closing of the Credit Facility which are netted against the term loans and are being amortized to interest expense on a straight-line basis which approximates the effective interest method. Amounts outstanding under the Revolving Credit Facility bear annual interest at a floating rate that is based, at the Company’s option, on either: (i) LIBOR plus 1.75% to 2.75% or (ii) a base rate plus 0.75% to 1.75% , in each case, depending upon the Company’s leverage ratio. In addition, the Company is obligated to pay an annual fee equal to 0.25% of the amount of the unused portion of the Revolving Credit Facility if amounts borrowed are greater than 33.3% of the borrowing capacity under the Revolving Credit Facility and 0.35% of the unused portion of the Revolving Credit Facility if amounts borrowed are less than or equal to 33.3% of the borrowing capacity under the Revolving Credit Facility. At June 30, 2017 , the Company had $58.0 million outstanding under the Revolving Credit Facility with a weighted average interest rate of approximately 3.45% and remaining borrowing capacity of $92.0 million . See Note 10 for subsequent repayment of the balance outstanding of the Revolving Credit Facility. Amounts outstanding under the Term Loans bear annual interest at a floating rate that is based, at the Company’s option, on either: (i) LIBOR plus 2.2% to 2.9% or (ii) a base rate plus 1.25% to 1.9% , in each case, depending upon the Company’s leverage ratio. In addition, the Company is obligated to pay an annual fee equal to 0.35% of the amount of the unused portion of the Term Loans. The Company entered into interest rate swaps to fix the interest rates on the term loans as discussed in Note 6. At June 30, 2017 , the Company had $60.0 million outstanding under the Term Loans with a fixed weighted average interest rate under the swaps of approximately 4.34% and remaining borrowing capacity of $40.0 million . The Company’s ability to borrow under the Credit Facility is subject to its ongoing compliance with a number of customary affirmative and negative covenants, including limitations with respect to liens, indebtedness, distributions, mergers, consolidations, investments, restricted payments and asset sales, as well as financial maintenance covenants. Also, the Company’s present financing policy prohibits incurring debt (secured or unsecured) in excess of 40% of its total book capitalization. The Company was in compliance with its financial covenants under its Credit Facility at June 30, 2017 . |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Risk Management Objective of Using Derivatives The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative or other purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations. Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and/or caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps designated as cash flow hedges involve the receipt of variable-rate amounts if interest rates rise above the cap strike rate on the contract. As of June 30, 2017 , the Company had two outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk for notional amounts totaling $60.0 million . The Company had recorded the fair value of its interest rate derivatives totaling approximately $436,000 in other liabilities in its Condensed Consolidated Balance Sheet. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive loss and is subsequently reclassified to interest expense in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized in interest expense. Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s Term Loans. During the next twelve months, the Company estimates that an additional $404,000 will be reclassified from other comprehensive income ("OCI") as an increase to interest expense. The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the three and six months ended June 30, 2017 . (Dollars in thousands) Three Months Ended Six Months Ended Amount of gain (loss) recognized in OCI on derivative $ (440 ) $ (598 ) Amount of gain (loss) reclassified from accumulated OCI into interest expense $ (156 ) $ (162 ) Amount of gain (loss) recognized in income on derivative (ineffective portion, reclassifications of missed forecasted transactions and amounts excluded from effectiveness testing) $ — $ — Credit-risk-related Contingent Feature s As of June 30, 2017 , the fair value of derivatives in a net liability position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $439,000 . As of June 30, 2017 , the Company has not posted any collateral related to these agreements and was not in breach of any agreement provisions. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value of approximately $460,000 at June 30, 2017 . |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock The following table provides a reconciliation of the beginning and ending common stock balances for the six months ended June 30, 2017 and for the year ended December 31, 2016 : Six Months Ended Year Ended December 31, 2016 Balance, beginning of period 12,988,482 7,596,940 Issuance of common stock — 5,175,000 Restricted stock-based awards 132,681 216,542 Balance, end of period 13,121,163 12,988,482 Universal Shelf S-3 Registration Statement On September 13, 2016, the Company filed a registration statement on Form S-3 that allows us to offer debt or equity securities (or a combination thereof) of up to $750.0 million from time to time. The Form S-3 registration statement was declared effective as of September 26, 2016. During July 2017, the Company completed an equity offering, discussed in more detail in Note 10, and issued approximately $114.6 million in shares of its common stock under its Form S-3 registration statement, which results in approximately $635.4 million remaining to be issued under the Form S-3 registration statement. |
Net Income Per Common Share
Net Income Per Common Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share | Net Income Per Common Share The following table sets forth the computation of basic and diluted net income per common share. Three Months Ended Six Months Ended (Dollars in thousands, except per share data) 2017 2016 2017 2016 Net income $ 466 $ 508 $ 1,379 $ 624 Weighted average Common Shares outstanding Weighted average Common Shares outstanding 13,108,974 12,249,676 13,099,382 9,973,110 Unvested restricted stock (422,791 ) (211,295 ) (413,199 ) (198,328 ) Weighted average Common Shares outstanding–Basic 12,686,183 12,038,381 12,686,183 9,774,782 Weighted average Common Shares outstanding–Basic 12,686,183 12,038,381 12,686,183 9,774,782 Dilutive effect of restricted stock 129,422 26,458 154,547 59,268 Weighted average Common Shares outstanding –Diluted 12,815,605 12,064,839 12,840,730 9,834,050 Basic Net Income per Common Share $ 0.04 $ 0.04 $ 0.11 $ 0.06 Diluted Net Income per Common Share $ 0.04 $ 0.04 $ 0.11 $ 0.06 |
Incentive Plan
Incentive Plan | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Incentive Plan | Incentive Plan Under the Company's 2014 Incentive Plan, awards may be made in the form of restricted stock, cash or a combination of both. Compensation expense recognized from the amortization of the value of the Company's officer, employee and director shares over the applicable vesting periods during the three months ended June 30, 2017 and 2016 was approximately $0.3 million and $0.1 million , respectively, and during the six months ended June 30, 2017 and 2016 was approximately $0.7 million and $0.3 million , respectively. A summary of the activity under the 2014 Incentive Plan for the three and six months ended June 30, 2017 and 2016 is included in the table below. Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Stock-based awards, beginning of period 419,070 203,471 302,299 85,757 Stock in lieu of compensation 4,843 7,074 64,128 65,931 Stock awards 11,067 14,350 68,553 73,207 Total granted 15,910 21,424 132,681 139,138 Stock-based awards, end of period 434,980 224,895 434,980 224,895 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Dividend Declared On August 7, 2017 , the Company’s Board of Directors declared a quarterly common stock dividend in the amount of $0.3925 per share. The dividend is payable on September 1, 2017 to stockholders of record on August 28, 2017 . Equity Offering On July 26, 2017, the Company completed a public offering of 4,887,500 shares of its common stock, including 637,500 shares of common stock issued in connection with the exercise in full of the underwriters' option to purchase additional shares, and received net proceeds of approximately $108.9 million after deducting underwriting discount and commissions and estimated offering expenses payable by the Company. Proceeds from the offering were used to repay the outstanding balance on our revolving credit facility totaling $58.0 million . The remaining proceeds will be used to fund our future investments and for general corporate and working capital purposes. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. This interim financial information should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. This interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2017 . |
Principles of Consolidation | Principles of Consolidation Our Condensed Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries, and may also include joint ventures, partnerships and variable interest entities, or VIEs, where the Company controls the operating activities. All material intercompany accounts and transactions have been eliminated. |
Use of Estimates in the Condensed Consolidated Financial Statements | Use of Estimates in the Condensed Consolidated Financial Statements Preparation of the Condensed Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results may materially differ from those estimates. |
Segment Reporting | Segment Reporting The Company acquires and owns healthcare-related real estate properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers in non-urban markets. The Company is managed as one reporting unit, rather than multiple reporting units, for internal reporting purposes and for internal decision-making. Therefore, the Company discloses its operating results in a single segment. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents includes short-term investments with original maturities of three months or less when purchased. |
Accounting for Real Estate Property Acquisitions | Accounting for Real Estate Property Acquisitions Real estate property acquisitions are accounted for as business combinations or asset purchases. An acquisition accounted for as a business combination is recorded at fair value and related closing costs are expensed. An acquisition accounted for as an asset purchase is recorded at its purchase price, inclusive of acquisition costs, which is allocated among the acquired assets and assumed liabilities based upon their relative fair values at the date of acquisition. Upon the adoption of Accounting Standards Update ("ASU") No, 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , on January 1, 2017, the Company expects that substantially all of its acquisitions will be accounted for as asset acquisitions. The allocation of real estate property acquisitions may include land, building and improvements, personal property, and identified intangible assets and liabilities (consisting of above- and below-market leases, in-place leases, and tenant relationships) based on the evaluation of information and estimates available at that date, and we allocate the purchase price based on these assessments. We make estimates of the acquisition date fair value of the tangible and intangible assets and acquired liabilities using information obtained from multiple sources as a result of pre-acquisition due diligence, tax records, and other sources. Based on these estimates, we recognize the acquired assets and liabilities at their estimated fair values. We expense transaction costs associated with business combinations in the period incurred. The fair value of tangible property assets acquired considers the value of the property as if vacant determined by comparable sales and other relevant data. The determination of fair value involves the use of significant judgment and estimation. We value land based on various inputs, which may include internal analysis of recently acquired properties, existing comparable properties within our portfolio, or third party appraisals or valuations based on comparable sales. In recognizing identified intangible assets and liabilities of an acquired property, the value of above- or below-market leases is estimated based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between contractual amounts to be received pursuant to the leases and management’s estimate of market lease rates measured over a period equal to the estimated remaining term of the lease. In the case of a below-market lease, the Company would also evaluate any renewal options associated with that lease to determine if the intangible should include those periods. The capitalized above-market or below-market lease intangibles are amortized as a reduction from or an addition to rental income over the estimated remaining term of the respective leases. In determining the value of in-place leases and tenant relationships, management considers current market conditions and costs to execute similar leases in arriving at an estimate of the carrying costs during the expected lease-up period from vacant to existing occupancy. In estimating carrying costs, management includes real estate taxes, insurance, other property operating expenses, estimates of lost rental revenue during the expected lease-up periods, and costs to execute similar leases, including leasing commissions. The values assigned to in-place leases and tenant relationships are amortized over the estimated remaining term of the lease. If a lease terminates prior to its scheduled expiration, all unamortized costs related to that lease are written off. Depreciation and amortization of real estate assets and liabilities in place as of June 30, 2017 , is recognized on a straight-line basis over the estimated useful life of the asset. |
Asset Impairments | Asset Impairments The Company assesses the potential for impairment of identifiable, definite-lived, intangible assets and long-lived assets, including real estate properties, whenever events occur or a change in circumstances indicates that the carrying value might not be fully recoverable. Indicators of impairment may include significant under-performance of an asset relative to historical or expected operating results; significant changes in the Company’s use of assets or the strategy for its overall business; plans to sell an asset before its depreciable life has ended; the expiration of a significant portion of leases in a property; or significant negative economic trends or negative industry trends for the Company or its operators. In addition, the Company’s review for possible impairment may include those assets subject to purchase options and those impacted by casualties, such as tornadoes and hurricanes. If management determines that the carrying value of the Company’s assets may not be fully recoverable based on the existence of any of the factors above, or others, management would measure and record an impairment charge based on the estimated fair value of the property or the estimated fair value less costs to sell the property. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. In calculating fair value, a company must maximize the use of observable market inputs, minimize the use of unobservable market inputs and disclose in the form of an outlined hierarchy the details of such fair value measurements. A hierarchy of valuation techniques is defined to determine whether the inputs to a fair value measurement are considered to be observable or unobservable in a marketplace. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. This hierarchy requires the use of observable market data when available. These inputs have created the following fair value hierarchy: • Level 1 – quoted prices for identical instruments in active markets. • Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3 – fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Our interest rate swaps are valued in the market using discounted cash flow techniques. These techniques incorporate Level 1 and Level 2 inputs. The market inputs are utilized in the discounted cash flow calculation considering the instrument’s term, notional amount, discount rate and credit risk. Significant inputs to the derivative valuation model for interest rate swaps are observable in active markets and are classified as Level 2 in the hierarchy. |
Lease Accounting | Lease Accounting We, as lessor, make a determination with respect to each of our leases whether they should be accounted for as operating leases or capital leases. The classification criteria is based on estimates regarding the fair value of the leased facilities, minimum lease payments, effective cost of funds, the economic useful life of the facilities, the existence of a bargain purchase option, and certain other terms in the lease agreements. We believe all of our leases meet the accounting criteria to be accounted for as operating leases. Payments received under operating leases are accounted for in the Condensed Consolidated Statements of Income as rental revenue for actual cash rent collected plus or minus straight-line adjustments such as lease escalators. Assets subject to operating leases are reported as real estate investments in the Condensed Consolidated Balance Sheets. Substantially all of our leases contain fixed or formula-based rent escalators. To the extent that the escalator increases are tied to a fixed index or rate, lease payments are accounted for on a straight-line basis over the life of the lease. |
Revenue Recognition | Revenue Recognition The Company recognizes rental revenue when it is realized or realizable and earned. There are four criteria that must all be met before a Company may recognize revenue, including persuasive evidence that an arrangement exists, delivery has occurred or services have been rendered (i.e., the tenant has taken possession of and controls the physical use of the leased asset), the price has been fixed or is determinable, and collectability is reasonably assured. The Company derives most of its revenues from its real estate property and mortgage note portfolio. The Company's rental and mortgage interest income is recognized based on contractual arrangements with its tenants and borrowers. Rental income is recognized as earned over the life of the lease agreement on a straight-line basis. Recognizing rental revenue on a straight-line basis for leases may result in recognizing revenue in amounts more or less than amounts currently due from tenants. If management determines that the collectability of straight-line rents is not reasonably assured, the amount of future revenue recognized may be limited to amounts contractually owed and, where appropriate, establish an allowance for estimated losses. Straight-line rent included in rental income was approximately $270,000 and $138,000 , respectively, for the three months ended June 30, 2017 and 2016 and was $535,000 and $234,000 , respectively, for the six months ended June 30, 2017 and 2016 . Mortgage interest income is recognized based on the interest rates, maturity dates and amortization periods set forth within each note agreement. Fees received related to its mortgage notes are amortized to mortgage interest income on a straight-line basis which approximates amortization under the effective interest method. Income received but not yet earned is deferred until such time it is earned. |
Allowance for Doubtful Accounts and Credit Losses | Allowance for Doubtful Accounts and Credit Losses Accounts Receivable Management monitors the aging and collectability of its accounts receivable balances on an ongoing basis. Whenever deterioration in the timeliness of payment from a tenant is noted, management investigates and determines the reason or reasons for the delay. Considering all information gathered, management’s judgment is exercised in determining whether a receivable is potentially uncollectible and, if so, how much or what percentage may be uncollectible. Among the factors management considers in determining collectability are: the type of contractual arrangement under which the receivable was recorded (e.g., triple net lease, gross lease, or other type of agreement); the tenant’s reason for slow payment; industry influences under which the tenant operates; evidence of willingness and ability of the tenant to pay the receivable; credit-worthiness of the tenant; collateral, security deposit, letters of credit or other monies held as security; tenant’s historical payment pattern; other contractual agreements between the tenant and the Company; relationship between the tenant and the Company; the state in which the tenant operates; and the existence of a guarantor and the willingness and ability of the guarantor to pay the receivable. Considering these factors and others, management concludes whether all or some of the aged receivable balance is likely uncollectible. Upon determining that some portion of the receivable is likely uncollectible, the Company will record a provision for bad debts for the amount it expects will be uncollectible. When efforts to collect a receivable are exhausted, the receivable amount is charged off against the allowance. At June 30, 2017 and December 31, 2016 , the Company had an allowance for bad debts of approximately $221,000 and $154,000 , respectively. Mortgage Note Receivable The Company evaluates collectability of mortgage notes and records allowances as necessary. A note is impaired when it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan as scheduled, including both contractual interest and principal payments. This assessment also includes an evaluation of the loan collateral. If a mortgage loan becomes past due, the Company will review the specific circumstances and may discontinue the accrual of interest on the loan. The loan is not returned to accrual status until the debtor has demonstrated the ability to continue debt service in accordance with the contractual terms. Loans placed on non-accrual status will be accounted for on a cash basis, in which income is recognized only upon the receipt of cash, or on a cost-recovery basis, in which all cash receipts reduce the carrying value of the loan, based on the Company's expectation of future collectability. The Company had one mortgage note receivable outstanding as of June 30, 2017 and December 31, 2016 with a principal balance of $10.6 million and $10.9 million , respectively. Principal and interest are due monthly based on a 20 -year amortization schedule, with a balloon payment due at maturity on September 30, 2026 . The borrower and several related entities filed for voluntary bankruptcy on June 23, 2017. As of June 30, 2017, the net balance on the mortgage note was approximately $10.5 million and the borrower was current on all obligations to the Company. The Company has evaluated the collectability of the mortgage note, and based on information currently available, believes the note to be collectible. The Company will continue to evaluate the collectability of the note as additional information becomes available. The Company may receive loan or commitment fees upon the funding of a mortgage note. The Company will amortize those fees into income over the life of the mortgage note on a straight line basis and will reflect the mortgage note, net of the unamortized fees, on its Consolidated Balance Sheet. |
Stock-Based Compensation | Stock-Based Compensation The Company's 2014 Incentive Plan, as amended, or our 2014 Incentive Plan, is intended to attract and retain qualified persons upon whom, in large measure, our sustained progress, growth and profitability depend, to motivate the participants to achieve long-term company goals and to more closely align the participants’ interests with those of our other stockholders by providing them with a proprietary interest in our growth and performance. The three distinct programs under the 2014 Incentive Plan are the Amended and Restated Alignment of Interest Program , the Amended and Restated Executive Officer Incentive Program and the Non-Executive Officer Incentive Program . Our executive officers, officers, employees, consultants and non-employee directors are eligible to participate in the 2014 Incentive Plan. The 2014 Incentive Plan increases, on an annual basis, the number of shares of common stock available for issuance to an amount equal to 7% of the total number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding year. The 2014 Incentive Plan is administered by the Company’s compensation committee, which interprets the 2014 Incentive Plan and has broad discretion to select the eligible persons to whom awards will be granted, as well as the type, size and terms and conditions of each award, including the number of shares subject to awards and the expiration date of, and the vesting schedule or other restrictions (including, without limitation, restrictive covenants) applicable to, awards. The Company recognizes share-based payments to its directors and employees in its Consolidated Statements of Income on a straight-line basis over the requisite service period based on the fair value of the award on the measurement date. |
Intangible Assets | Intangible Assets Intangible assets with indefinite lives are not amortized, but are tested at least annually for impairment. Intangible assets with finite lives are amortized over their respective lives to their estimated residual values and are reviewed for impairment only when impairment indicators are present. Identifiable intangible assets of the Company are generally comprised of in-place lease intangible assets, above- and below-market lease intangibles and deferred financing costs. In-place lease intangible assets are amortized on a straight-line basis over the applicable lives of the assets. Deferred financing costs are amortized to interest expense over the term of the related credit facility or other debt instrument using the straight-line method, which approximates the effective interest method. |
Contingent Liabilities | Contingent Liabilities From time to time, the Company may be subject to loss contingencies arising from legal proceedings and similar matters. Additionally, while the Company maintains comprehensive liability and property insurance with respect to each of its properties, the Company may be exposed to unforeseen losses related to uninsured or under-insured damages. Management will monitor any matter that may present a contingent liability, and, on a quarterly basis, will review any reserves and accruals relating to the liabilities, adjusting provisions as necessary in view of changes in available information. Liabilities for contingencies are first recorded when a loss is determined to be both probable and can be reasonably estimated. Changes in estimates regarding the exposure to a contingent loss will be reflected as adjustments to the related liability in the periods when they occur and will be disclosed in the notes to the Condensed Consolidated Financial Statements. On occasion, the Company may also have acquisitions which include contingent consideration. In 2016, the Company acquired a medical office building and concurrently recorded the fair value of contingent purchase price of approximately $0.5 million . Subsequently, management monitored this contingency and adjusted its liability to its estimated fair value on a quarterly basis, offsetting property operating expense in the periods when they occurred. In April 2017, the Company paid approximately $0.4 million in settlement of this contingent liability. |
Income Taxes/Sales and Use Taxes | Income Taxes The Company has elected to be taxed as a real estate investment trust ("REIT"), as defined under the Internal Revenue Code of 1986, as amended (the "Code"). We have also elected for one of our subsidiaries to be treated as a taxable REIT subsidiary ("TRS"), which is subject to federal and state income taxes. No provision has been made for federal income taxes for the REIT; however, the Company has made provisions for federal and state income taxes for the TRS. The Company intends at all times to qualify as a REIT under Sections 856 and 860 of the Code. The Company must distribute at least 90% per annum of its REIT taxable income to its stockholders (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with generally accepted accounting principles) and meet other requirements to continue to qualify as a real estate investment trust. The Company classifies interest and penalties related to uncertain tax positions, if any, in the Condensed Consolidated Statements of Income as a component of general and administrative expenses. Sales and Use Taxes The Company must pay sales and use taxes to certain state tax authorities based on rent collected from tenants in properties located in those states. The Company is generally reimbursed for those taxes by those tenants. The Company accounts for the payments to the taxing authority and subsequent reimbursement from the tenant on a net basis, included in tenant reimbursement revenue on the Company’s Condensed Consolidated Statements of Income. |
Concentration of Credit Risks | Concentration of Credit Risks Our credit risks primarily relate to cash and cash equivalents, our mortgage note receivable and our interest rate swaps, which are discussed below. Cash and cash equivalents are primarily held in bank accounts and overnight investments. We maintain our bank deposit accounts with large financial institutions in amounts that often exceed federally-insured limits. We have not experienced any losses in such accounts. |
Derivative Financial Instruments | Derivative Financial Instruments In the normal course of business, we are subject to risk from adverse fluctuations in interest rates. We have chosen to manage this risk through the use of derivative financial instruments, or interest rate swaps. Counterparties to these contracts are major financial institutions. We are exposed to credit loss in the event of nonperformance by these counterparties. We do not use derivative instruments for trading or speculative purposes. Our objective in managing exposure to market risk is to limit the impact on cash flows. To qualify for hedge accounting, our interest rate swaps must effectively reduce the risk exposure that they are designed to hedge. In addition, at inception of a qualifying cash flow hedging relationship, the underlying transaction or transactions must be, and be expected to remain, probable of occurring in accordance with our related assertions. All of our hedges are cash flow hedges and are recognized at their fair value in the Condensed Consolidated Balance Sheets. Changes in the fair value of the effective portion of the derivatives are recognized in accumulated other comprehensive loss, whereas the change in fair value of the ineffective portion is recognized in earnings in interest expense. |
Earnings Per Share | Earnings per Share Basic earnings per common share is calculated using weighted average shares outstanding less issued and outstanding non-vested shares of common stock. Diluted earnings per common share is calculated using weighted average shares outstanding plus the dilutive effect of the non-vested shares of common stock using the treasury stock method and the average stock price during the period. |
New Accounting Pronouncements | New Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-02, Leases . This standard requires a lessor to classify leases as either sales-type, finance or operating. A lease will be treated as a sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing. If the lessor doesn’t convey risks and rewards or control, an operating lease results. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessors for sales-type, direct financing, and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are not currently a lessee in any material lease arrangements and the amendments in ASU 2016-02 do not significantly change the current lessor accounting model; therefore, we do not currently believe that the adoption of this standard will have a material impact on our Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, as amended by ASU No. 2015-14, Revenue from Contracts with Customers , a comprehensive new revenue recognition standard that supersedes most existing revenue recognition guidance, including sales of real estate. This standard's core principle is that a company will recognize revenue when it transfers goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods and services. However, leasing contracts, representing the major source of the Company's revenues, are not within the scope of the new standard and will continue to be accounted for under other standards. This new standard is effective for the Company for annual and interim periods beginning on January 1, 2018 with early adoption permitted in 2017. The Company is currently in the early stages of evaluating the impact that ASU 2014-09 will have on revenues and disclosures generated from activities other than leasing, such as non-lease components and mortgages. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses , which changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, companies will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, companies will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than as reductions in the amortized cost of the securities. Companies will have to disclose significantly more information, including information they use to track credit quality by year of origination for most financing receivables. Companies will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. This standard is effective for the Company on January 1, 2020 with early adoption permitted. The Company is in the initial stage of evaluating the impact of this new standard on its notes and trade receivables. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments, which clarifies or provides guidance relating to eight specific cash flow classification issues. The standard should be applied retrospectively for each period presented, as appropriate. This new standard is effective for the Company on January 1, 2018 with early adoption permitted. Of the eight areas addressed, the Company expects that its presentation on its statements of cash flows could be impacted relating to cash payments of contingent consideration or settlement of insurance claims, based on historical transactions. In the future, however, the impact of this new guidance will depend on future transactions, though the impact will only be related to the classification of those items on the statement of cash flows and will not impact the Company's cash flows or its results of operations. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718) , which provides guidance about which changes in the terms or conditions of a share-based payment award require a company to apply modification accounting in Topic 718. Under ASU No. 2017-09, a company will generally be required to apply modification accounting unless the fair value or intrinsic value of the modified award, the vesting conditions of the modified award, and the classification of the modified award as equity or a liability are the same as the original award immediately before the award is modified. This standard is effective for the Company on January 1, 2018 with early adoption permitted. The Company does not believe the adoption of this standard will have an impact on its results of operations, but could impact the accounting on future modifications of share-based awards. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule of property, plant, and equipment estimated useful lives | The estimated useful lives at June 30, 2017 are as follows: Land improvements 3 - 15 years Buildings 20 - 40 years Building improvements 3.0 - 39.8 years Tenant improvements 2.3 - 6.9 years Lease intangibles 1.4 - 13.7 years Personal property 3 -10 years |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Real Estate [Abstract] | |
Schedule of real estate property investments | At June 30, 2017 , the Company had investments of approximately $329.3 million in 78 real estate properties, including a mortgage note. The following table summarizes the Company's real estate investments. (Dollars in thousands) Number of Facilities Land and Land Improvements Buildings, Improvements, and Lease Intangibles Personal Property Total Accumulated Depreciation Medical office buildings: Florida 4 $ 4,138 $ 23,777 $ — $ 27,915 $ 1,847 Ohio 5 3,167 23,516 — 26,683 2,394 Texas 3 3,096 12,172 — 15,268 2,615 Kansas 2 1,379 10,497 — 11,876 2,205 Iowa 1 2,241 8,979 — 11,220 621 Illinois 1 821 8,760 — 9,581 1,213 Virginia 1 369 4,649 — 5,018 78 Other states 13 3,272 22,692 — 25,964 1,665 30 18,483 115,042 — 133,525 12,638 Physician clinics: Kansas 3 1,616 10,899 — 12,515 1,579 Florida 3 — 5,950 — 5,950 413 Illinois 1 1,891 3,134 — 5,025 5 Other states 9 3,195 18,459 — 21,654 2,401 16 6,702 38,442 — 45,144 4,398 Surgical centers and hospitals: Louisiana 1 1,683 21,353 — 23,036 311 Indiana 1 523 14,405 — 14,928 15 Michigan 2 629 8,266 — 8,895 1,467 Illinois 1 2,171 5,410 — 7,581 527 Florida 1 271 7,004 — 7,275 4 Arizona 2 576 5,389 — 5,965 748 Other states 5 1,555 11,001 — 12,556 2,463 13 7,408 72,828 — 80,236 5,535 Specialty centers: Alabama 3 415 4,417 — 4,832 1,045 Nevada 1 276 4,402 — 4,678 92 Kentucky 1 193 3,432 — 3,625 651 Other states 10 1,716 15,227 — 16,943 1,532 15 2,600 27,478 — 30,078 3,320 Behavioral facilities: Illinois 1 1,300 18,803 — 20,103 509 Ohio 1 514 4,153 — 4,667 26 Indiana 1 270 2,651 — 2,921 111 3 2,084 25,607 — 27,691 646 Corporate property — — 2,011 109 2,120 73 Total owned properties 77 $ 37,277 $ 281,408 $ 109 $ 318,794 $ 26,610 Mortgage note receivable, net 1 — — — 10,518 — Total real estate investments 78 $ 37,277 $ 281,408 $ 109 $ 329,312 $ 26,610 |
Real Estate Leases (Tables)
Real Estate Leases (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Leases [Abstract] | |
Schedule of future minimum lease payments for operating leases | Future minimum lease payments under the non-cancelable operating leases due the Company for the years ending December 31, as of June 30, 2017 , are as follows (in thousands): 2017 $ 15,082 2018 27,225 2019 24,065 2020 21,403 2021 18,518 2022 and thereafter 103,039 $ 209,332 |
Real Estate Acquisitions (Table
Real Estate Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule of assets acquired and liabilities assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed in the property acquisitions for the first six months of 2017. Estimated Fair Value Estimated Useful Life (In thousands) (In years) Land $ 7,264 Buildings 49,506 20 - 40 Intangibles: In place lease intangibles 8,982 1.4 - 8.9 Total intangibles 8,982 Accounts receivable and other assets assumed 16 Accounts payable, accrued liabilities and other liabilities assumed (1) (332 ) Prorated rent, interest and operating expense reimbursement amounts collected (271 ) Total cash consideration $ 65,165 (1) Includes security deposits received. |
Debt, net (Tables)
Debt, net (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of debt | The table below details the Company's debt as of June 30, 2017 and December 31, 2016 . Balance as of (Dollars in thousands) June 30, 2017 December 31, 2016 Maturity Dates Revolving Credit Facility $ 58,000 $ 51,000 8/19 5-Year Term Loan, net 29,628 — 3/22 7-Year Term Loan, net 29,623 — 3/24 $ 117,251 $ 51,000 |
Derivative Financial Instrume25
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative gain (loss) | The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the three and six months ended June 30, 2017 . (Dollars in thousands) Three Months Ended Six Months Ended Amount of gain (loss) recognized in OCI on derivative $ (440 ) $ (598 ) Amount of gain (loss) reclassified from accumulated OCI into interest expense $ (156 ) $ (162 ) Amount of gain (loss) recognized in income on derivative (ineffective portion, reclassifications of missed forecasted transactions and amounts excluded from effectiveness testing) $ — $ — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of reconciliation of common stock | The following table provides a reconciliation of the beginning and ending common stock balances for the six months ended June 30, 2017 and for the year ended December 31, 2016 : Six Months Ended Year Ended December 31, 2016 Balance, beginning of period 12,988,482 7,596,940 Issuance of common stock — 5,175,000 Restricted stock-based awards 132,681 216,542 Balance, end of period 13,121,163 12,988,482 |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | The following table sets forth the computation of basic and diluted net income per common share. Three Months Ended Six Months Ended (Dollars in thousands, except per share data) 2017 2016 2017 2016 Net income $ 466 $ 508 $ 1,379 $ 624 Weighted average Common Shares outstanding Weighted average Common Shares outstanding 13,108,974 12,249,676 13,099,382 9,973,110 Unvested restricted stock (422,791 ) (211,295 ) (413,199 ) (198,328 ) Weighted average Common Shares outstanding–Basic 12,686,183 12,038,381 12,686,183 9,774,782 Weighted average Common Shares outstanding–Basic 12,686,183 12,038,381 12,686,183 9,774,782 Dilutive effect of restricted stock 129,422 26,458 154,547 59,268 Weighted average Common Shares outstanding –Diluted 12,815,605 12,064,839 12,840,730 9,834,050 Basic Net Income per Common Share $ 0.04 $ 0.04 $ 0.11 $ 0.06 Diluted Net Income per Common Share $ 0.04 $ 0.04 $ 0.11 $ 0.06 |
Incentive Plan (Tables)
Incentive Plan (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of nonvested restricted stock activity | A summary of the activity under the 2014 Incentive Plan for the three and six months ended June 30, 2017 and 2016 is included in the table below. Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Stock-based awards, beginning of period 419,070 203,471 302,299 85,757 Stock in lieu of compensation 4,843 7,074 64,128 65,931 Stock awards 11,067 14,350 68,553 73,207 Total granted 15,910 21,424 132,681 139,138 Stock-based awards, end of period 434,980 224,895 434,980 224,895 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Business Overview/Segment Reporting (Details) $ in Thousands, ft² in Millions | 6 Months Ended |
Jun. 30, 2017USD ($)ft²statereporting_unitreal_estate_property | |
Accounting Policies [Abstract] | |
General partner ownership | 100.00% |
Value of real estate property investments and mortgages | $ | $ 329,312 |
Number of real estate properties | real_estate_property | 78 |
Number of states in which real estate investments are in | state | 25 |
Area of real estate property (in square feet) | ft² | 1.7 |
Number of reporting units | reporting_unit | 1 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Real Estate Properties (Details) | 6 Months Ended |
Jun. 30, 2017 | |
Land Improvements [Member] | Minimum [Member] | |
Real Estate Properties [Line Items] | |
Estimated useful life (in years) | 3 years |
Land Improvements [Member] | Maximum [Member] | |
Real Estate Properties [Line Items] | |
Estimated useful life (in years) | 15 years |
Building [Member] | Minimum [Member] | |
Real Estate Properties [Line Items] | |
Estimated useful life (in years) | 20 years |
Building [Member] | Maximum [Member] | |
Real Estate Properties [Line Items] | |
Estimated useful life (in years) | 40 years |
Building Improvements [Member] | Minimum [Member] | |
Real Estate Properties [Line Items] | |
Estimated useful life (in years) | 3 years |
Building Improvements [Member] | Maximum [Member] | |
Real Estate Properties [Line Items] | |
Estimated useful life (in years) | 39 years 10 months |
Tenant Improvements [Member] | Minimum [Member] | |
Real Estate Properties [Line Items] | |
Estimated useful life (in years) | 2 years 4 months |
Tenant Improvements [Member] | Maximum [Member] | |
Real Estate Properties [Line Items] | |
Estimated useful life (in years) | 6 years 11 months |
Lease Intangibles [Member] | Minimum [Member] | |
Real Estate Properties [Line Items] | |
Estimated useful life (in years) | 1 year 4 months 15 days |
Lease Intangibles [Member] | Maximum [Member] | |
Real Estate Properties [Line Items] | |
Estimated useful life (in years) | 13 years 8 months |
Personal Property [Member] | Minimum [Member] | |
Real Estate Properties [Line Items] | |
Estimated useful life (in years) | 3 years |
Personal Property [Member] | Maximum [Member] | |
Real Estate Properties [Line Items] | |
Estimated useful life (in years) | 10 years |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Revenue Recognition/Account and Mortgage Receivable (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017USD ($)mortgage_note_receivable | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)mortgage_note_receivable | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($)mortgage_note_receivable | |
Deferred Revenue Arrangement [Line Items] | |||||
Straight line rent | $ 270,000 | $ 138,000 | $ 535,000 | $ 234,000 | |
Provision for bad debts | $ 221,000 | $ 221,000 | $ 154,000 | ||
Number of mortgage note receivables | mortgage_note_receivable | 1 | 1 | |||
Mortgage note receivable | $ 10,518,000 | $ 10,518,000 | 10,786,000 | ||
Amortization period | 20 years | ||||
Other Liabilities [Member] | |||||
Deferred Revenue Arrangement [Line Items] | |||||
Deferred revenue | $ 1,000,000 | $ 1,000,000 | $ 800,000 | ||
Mortgage Receivable [Member] | |||||
Deferred Revenue Arrangement [Line Items] | |||||
Number of mortgage note receivables | mortgage_note_receivable | 1 | 1 | 1 | ||
Mortgage note receivable | $ 10,600,000 | $ 10,600,000 | $ 10,900,000 | ||
Mortgage note receivable, net balance | $ 10,500,000 | $ 10,500,000 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Stock-Based Compensation/Contingent Liabilities (Details) $ in Thousands | 1 Months Ended | 6 Months Ended | ||
Apr. 30, 2017USD ($) | Jun. 30, 2017USD ($)program | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Settlement of contingent purchase price | $ 400 | $ 393 | $ 0 | |
2014 Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of programs under plan | program | 3 | |||
Common Stock [Member] | 2014 Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of shares reserved for future issuance | 7.00% | |||
Medical office [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Contingent liabilities | $ 500 |
Real Estate Investments - Addit
Real Estate Investments - Additional Information (Details) $ in Thousands | Jun. 30, 2017USD ($)real_estate_property |
Real Estate [Abstract] | |
Value of real estate property investments and mortgages | $ | $ 329,312 |
Number of real estate properties | real_estate_property | 78 |
Real Estate Investments - Sched
Real Estate Investments - Schedule of Real Estate Property Investments (Details) $ in Thousands | Jun. 30, 2017USD ($)mortgage_note_receivablereal_estate_property | Dec. 31, 2016USD ($) |
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 78 | |
Land and Land Improvements | $ 37,277 | $ 29,884 |
Buildings, Improvements, and Lease Intangibles | 281,408 | 222,755 |
Personal Property | 109 | 97 |
Total real estate properties | 318,794 | 252,736 |
Accumulated Depreciation | $ 26,610 | 18,404 |
Number of mortgage note receivables | mortgage_note_receivable | 1 | |
Mortgage note receivable, net | $ 10,518 | $ 10,786 |
Value of real estate property investments and mortgages | $ 329,312 | |
Medical office [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 30 | |
Land and Land Improvements | $ 18,483 | |
Buildings, Improvements, and Lease Intangibles | 115,042 | |
Total real estate properties | 133,525 | |
Accumulated Depreciation | $ 12,638 | |
Medical office [Member] | Florida [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 4 | |
Land and Land Improvements | $ 4,138 | |
Buildings, Improvements, and Lease Intangibles | 23,777 | |
Total real estate properties | 27,915 | |
Accumulated Depreciation | $ 1,847 | |
Medical office [Member] | Illinois [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land and Land Improvements | $ 821 | |
Buildings, Improvements, and Lease Intangibles | 8,760 | |
Total real estate properties | 9,581 | |
Accumulated Depreciation | $ 1,213 | |
Medical office [Member] | Iowa [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land and Land Improvements | $ 2,241 | |
Buildings, Improvements, and Lease Intangibles | 8,979 | |
Total real estate properties | 11,220 | |
Accumulated Depreciation | $ 621 | |
Medical office [Member] | Kansas [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 2 | |
Land and Land Improvements | $ 1,379 | |
Buildings, Improvements, and Lease Intangibles | 10,497 | |
Total real estate properties | 11,876 | |
Accumulated Depreciation | $ 2,205 | |
Medical office [Member] | Ohio [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 5 | |
Land and Land Improvements | $ 3,167 | |
Buildings, Improvements, and Lease Intangibles | 23,516 | |
Total real estate properties | 26,683 | |
Accumulated Depreciation | $ 2,394 | |
Medical office [Member] | Other States [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 13 | |
Land and Land Improvements | $ 3,272 | |
Buildings, Improvements, and Lease Intangibles | 22,692 | |
Total real estate properties | 25,964 | |
Accumulated Depreciation | $ 1,665 | |
Medical office [Member] | Texas [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 3 | |
Land and Land Improvements | $ 3,096 | |
Buildings, Improvements, and Lease Intangibles | 12,172 | |
Total real estate properties | 15,268 | |
Accumulated Depreciation | $ 2,615 | |
Medical office [Member] | Virginia [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land and Land Improvements | $ 369 | |
Buildings, Improvements, and Lease Intangibles | 4,649 | |
Total real estate properties | 5,018 | |
Accumulated Depreciation | $ 78 | |
Physician clinics [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 16 | |
Land and Land Improvements | $ 6,702 | |
Buildings, Improvements, and Lease Intangibles | 38,442 | |
Total real estate properties | 45,144 | |
Accumulated Depreciation | $ 4,398 | |
Physician clinics [Member] | Florida [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 3 | |
Land and Land Improvements | $ 0 | |
Buildings, Improvements, and Lease Intangibles | 5,950 | |
Total real estate properties | 5,950 | |
Accumulated Depreciation | $ 413 | |
Physician clinics [Member] | Illinois [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land and Land Improvements | $ 1,891 | |
Buildings, Improvements, and Lease Intangibles | 3,134 | |
Total real estate properties | 5,025 | |
Accumulated Depreciation | $ 5 | |
Physician clinics [Member] | Kansas [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 3 | |
Land and Land Improvements | $ 1,616 | |
Buildings, Improvements, and Lease Intangibles | 10,899 | |
Total real estate properties | 12,515 | |
Accumulated Depreciation | $ 1,579 | |
Physician clinics [Member] | Other States [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 9 | |
Land and Land Improvements | $ 3,195 | |
Buildings, Improvements, and Lease Intangibles | 18,459 | |
Total real estate properties | 21,654 | |
Accumulated Depreciation | $ 2,401 | |
Surgical Centers and Hospitals [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 13 | |
Land and Land Improvements | $ 7,408 | |
Buildings, Improvements, and Lease Intangibles | 72,828 | |
Total real estate properties | 80,236 | |
Accumulated Depreciation | $ 5,535 | |
Surgical Centers and Hospitals [Member] | Arizona [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 2 | |
Land and Land Improvements | $ 576 | |
Buildings, Improvements, and Lease Intangibles | 5,389 | |
Total real estate properties | 5,965 | |
Accumulated Depreciation | $ 748 | |
Surgical Centers and Hospitals [Member] | Florida [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land and Land Improvements | $ 271 | |
Buildings, Improvements, and Lease Intangibles | 7,004 | |
Total real estate properties | 7,275 | |
Accumulated Depreciation | $ 4 | |
Surgical Centers and Hospitals [Member] | Illinois [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land and Land Improvements | $ 2,171 | |
Buildings, Improvements, and Lease Intangibles | 5,410 | |
Total real estate properties | 7,581 | |
Accumulated Depreciation | $ 527 | |
Surgical Centers and Hospitals [Member] | Indiana [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land and Land Improvements | $ 523 | |
Buildings, Improvements, and Lease Intangibles | 14,405 | |
Total real estate properties | 14,928 | |
Accumulated Depreciation | $ 15 | |
Surgical Centers and Hospitals [Member] | Louisiana [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land and Land Improvements | $ 1,683 | |
Buildings, Improvements, and Lease Intangibles | 21,353 | |
Total real estate properties | 23,036 | |
Accumulated Depreciation | $ 311 | |
Surgical Centers and Hospitals [Member] | Michigan [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 2 | |
Land and Land Improvements | $ 629 | |
Buildings, Improvements, and Lease Intangibles | 8,266 | |
Total real estate properties | 8,895 | |
Accumulated Depreciation | $ 1,467 | |
Surgical Centers and Hospitals [Member] | Other States [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 5 | |
Land and Land Improvements | $ 1,555 | |
Buildings, Improvements, and Lease Intangibles | 11,001 | |
Total real estate properties | 12,556 | |
Accumulated Depreciation | $ 2,463 | |
Specialty Centers [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 15 | |
Land and Land Improvements | $ 2,600 | |
Buildings, Improvements, and Lease Intangibles | 27,478 | |
Total real estate properties | 30,078 | |
Accumulated Depreciation | $ 3,320 | |
Specialty Centers [Member] | Alabama [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 3 | |
Land and Land Improvements | $ 415 | |
Buildings, Improvements, and Lease Intangibles | 4,417 | |
Total real estate properties | 4,832 | |
Accumulated Depreciation | $ 1,045 | |
Specialty Centers [Member] | Kentucky [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land and Land Improvements | $ 193 | |
Buildings, Improvements, and Lease Intangibles | 3,432 | |
Total real estate properties | 3,625 | |
Accumulated Depreciation | $ 651 | |
Specialty Centers [Member] | Nevada [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land and Land Improvements | $ 276 | |
Buildings, Improvements, and Lease Intangibles | 4,402 | |
Total real estate properties | 4,678 | |
Accumulated Depreciation | $ 92 | |
Specialty Centers [Member] | Other States [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 10 | |
Land and Land Improvements | $ 1,716 | |
Buildings, Improvements, and Lease Intangibles | 15,227 | |
Total real estate properties | 16,943 | |
Accumulated Depreciation | $ 1,532 | |
Behavioral facilities [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 3 | |
Land and Land Improvements | $ 2,084 | |
Buildings, Improvements, and Lease Intangibles | 25,607 | |
Total real estate properties | 27,691 | |
Accumulated Depreciation | $ 646 | |
Behavioral facilities [Member] | Illinois [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land and Land Improvements | $ 1,300 | |
Buildings, Improvements, and Lease Intangibles | 18,803 | |
Total real estate properties | 20,103 | |
Accumulated Depreciation | $ 509 | |
Behavioral facilities [Member] | Indiana [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land and Land Improvements | $ 270 | |
Buildings, Improvements, and Lease Intangibles | 2,651 | |
Total real estate properties | 2,921 | |
Accumulated Depreciation | $ 111 | |
Behavioral facilities [Member] | Ohio [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land and Land Improvements | $ 514 | |
Buildings, Improvements, and Lease Intangibles | 4,153 | |
Total real estate properties | 4,667 | |
Accumulated Depreciation | $ 26 | |
Corporate property [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 0 | |
Land and Land Improvements | $ 0 | |
Buildings, Improvements, and Lease Intangibles | 2,011 | |
Personal Property | 109 | |
Total real estate properties | 2,120 | |
Accumulated Depreciation | $ 73 | |
Total Properties [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 77 | |
Land and Land Improvements | $ 37,277 | |
Buildings, Improvements, and Lease Intangibles | 281,408 | |
Personal Property | 109 | |
Total real estate properties | 318,794 | |
Accumulated Depreciation | $ 26,610 |
Real Estate Leases (Details)
Real Estate Leases (Details) $ in Thousands | Jun. 30, 2017USD ($) |
Leases [Abstract] | |
2,017 | $ 15,082 |
2,018 | 27,225 |
2,019 | 24,065 |
2,020 | 21,403 |
2,021 | 18,518 |
2022 and thereafter | 103,039 |
Total | $ 209,332 |
Real Estate Acquisitions (Detai
Real Estate Acquisitions (Details) ft² in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2017USD ($)ft²real_estate_property | Mar. 31, 2017USD ($)ft²real_estate_property | Jun. 30, 2017USD ($)ft² | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of properties acquired | real_estate_property | 10 | 10 | |
Area of real estate property (in square feet) | ft² | 203 | 145 | 203 |
Aggregate purchase price | $ 36,200 | $ 28,500 | |
Cash consideration | $ 65,165 | ||
Percentage of properties that were leased at acquisition | 100.00% | 95.20% | |
General and Administrative Expense [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Transaction costs | $ 300 | $ 400 | 300 |
10 Properties Acquired in 2nd Quarter of 2017 [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Cash consideration | 35,900 | ||
Revenue from properties acquired | 200 | ||
Net income (loss) from properties acquired | $ 100 | ||
10 Properties Acquired in First Quarter 2017 [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Cash consideration | 28,400 | ||
Revenue from properties acquired | 1,100 | ||
Net income (loss) from properties acquired | $ 300 | ||
Property Adjacent To Corporate Property [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Cash consideration | $ 900 |
Real Estate Acquisitions - Asse
Real Estate Acquisitions - Assets Acquired and Liabilities Assumed (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |
Land | $ 7,264 |
Buildings | 49,506 |
Intangibles: | |
Total intangibles | 8,982 |
Accounts receivable and other assets assumed | 16 |
Accounts payable, accrued liabilities and other liabilities assumed | (332) |
Prorated rent, interest and operating expense reimbursement amounts collected | (271) |
Total cash consideration | 65,165 |
In Place Leases [Member] | |
Intangibles: | |
Lease intangibles | $ 8,982 |
Minimum [Member] | In Place Leases [Member] | |
Intangibles: | |
Estimated useful life (in years) | 1 year 5 months |
Maximum [Member] | In Place Leases [Member] | |
Intangibles: | |
Estimated useful life (in years) | 8 years 11 months |
Building [Member] | Minimum [Member] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |
Estimated useful life (in years) | 20 years |
Building [Member] | Maximum [Member] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |
Estimated useful life (in years) | 40 years |
Debt, net - Schedule of Debt (D
Debt, net - Schedule of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Debt, net | $ 117,251 | $ 51,000 |
Term Loan [Member] | Second Amended And Restated Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Debt, net | 60,000 | |
Revolving Credit Facility [Member] | Line of Credit [Member] | Second Amended And Restated Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Debt, net | 58,000 | 51,000 |
5 Year Term Loan [Member] | Term Loan [Member] | Second Amended And Restated Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Debt, net | 29,628 | 0 |
7 Year Term Loan [Member] | Term Loan [Member] | Second Amended And Restated Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Debt, net | $ 29,623 | $ 0 |
Debt, net (Details)
Debt, net (Details) | Mar. 29, 2017USD ($)option | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Line of Credit Facility [Line Items] | ||||
Draw on term loan borrowings | $ 60,000,000 | $ 0 | ||
Amount outstanding | $ 117,251,000 | $ 51,000,000 | ||
Second Amended And Restated Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Minimum draw on debt instrument | $ 10,000,000 | |||
Fees and other costs | 784,000 | |||
Maximum percentage of total book capitalization | 40.00% | |||
Second Amended And Restated Credit Facility [Member] | Term Loan [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Face amount | $ 100,000,000 | |||
Unused borrowing commitment fee percentage | 0.35% | |||
Amount outstanding | $ 60,000,000 | |||
Weighted average interest rate percentage | 4.34% | |||
Remaining borrowing capacity | $ 40,000,000 | |||
Second Amended And Restated Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | Term Loan [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate percentage | 2.20% | |||
Second Amended And Restated Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | Term Loan [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate percentage | 2.90% | |||
Second Amended And Restated Credit Facility [Member] | Base Rate [Member] | Minimum [Member] | Term Loan [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate percentage | 1.25% | |||
Second Amended And Restated Credit Facility [Member] | Base Rate [Member] | Maximum [Member] | Term Loan [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate percentage | 1.90% | |||
Second Amended And Restated Credit Facility [Member] | Revolving Credit Facility [Member] | Line of Credit [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 150,000,000 | |||
Number of options to extend | option | 2 | |||
Amount outstanding | $ 58,000,000 | 51,000,000 | ||
Weighted average interest rate percentage | 3.45% | |||
Remaining borrowing capacity | $ 92,000,000 | |||
Second Amended And Restated Credit Facility [Member] | Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | Line of Credit [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate percentage | 1.75% | |||
Second Amended And Restated Credit Facility [Member] | Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | Line of Credit [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate percentage | 2.75% | |||
Second Amended And Restated Credit Facility [Member] | Revolving Credit Facility [Member] | Base Rate [Member] | Minimum [Member] | Line of Credit [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate percentage | 0.75% | |||
Second Amended And Restated Credit Facility [Member] | Revolving Credit Facility [Member] | Base Rate [Member] | Maximum [Member] | Line of Credit [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate percentage | 1.75% | |||
Second Amended And Restated Credit Facility [Member] | Credit Facility, Accordion Feature [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 450,000,000 | |||
Second Amended And Restated Credit Facility [Member] | 5 Year Term Loan [Member] | Term Loan [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Face amount | $ 50,000,000 | |||
Debt term | 5 years | |||
Draw on term loan borrowings | $ 30,000,000 | |||
Amount outstanding | 29,628,000 | 0 | ||
Second Amended And Restated Credit Facility [Member] | 7 Year Term Loan [Member] | Term Loan [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Face amount | $ 50,000,000 | |||
Debt term | 7 years | |||
Draw on term loan borrowings | 30,000,000 | |||
Amount outstanding | $ 29,623,000 | $ 0 | ||
Second Amended And Restated Credit Facility [Member] | Revolving Credit Facility, Unused Borrowing Capacity Rate 1 [Member] | Line of Credit [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Unused borrowing commitment fee percentage | 0.25% | |||
Percentage of borrowing capacity outstanding | 33.30% | |||
Second Amended And Restated Credit Facility [Member] | Revolving Credit Facility, Unused Borrowing Capacity Rate 2 [Member] | Line of Credit [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Unused borrowing commitment fee percentage | 0.35% | |||
Percentage of borrowing capacity outstanding | 33.30% |
Derivative Financial Instrume40
Derivative Financial Instruments (Details) | 6 Months Ended |
Jun. 30, 2017USD ($)derivative_instrument | |
Derivative [Line Items] | |
Cash flow hedges reclassified to interest expense | $ 404,000 |
Cash Flow Hedging [Member] | Interest Rate Contract [Member] | |
Derivative [Line Items] | |
Number outstanding interest rate derivatives | derivative_instrument | 2 |
Notional amount | $ 60,000,000 |
Fair value of derivatives in net liability position | 439,000 |
Aggregate termination value | 460,000 |
Other Liabilities [Member] | Cash Flow Hedging [Member] | Interest Rate Contract [Member] | |
Derivative [Line Items] | |
Fair value of derivate liabilities | $ 436,000 |
Derivative Financial Instrume41
Derivative Financial Instruments - Cash Flow Hedging (Details) - Interest Rate Contract [Member] - Cash Flow Hedging [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2017 | Jun. 30, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gain (loss) recognized in OCI on derivative | $ (440) | $ (598) |
Amount of gain (loss) reclassified from accumulated OCI into interest expense | (156) | (162) |
Amount of gain (loss) recognized in income on derivative (ineffective portion, reclassifications of missed forecasted transactions and amounts excluded from effectiveness testing) | $ 0 | $ 0 |
Stockholders' Equity - Reconcil
Stockholders' Equity - Reconciliation of Common Stock (Details) - shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance, beginning of period (in shares) | 12,988,482 | 7,596,940 |
Issuance of common stock (in shares) | 0 | 5,175,000 |
Restricted stock-based awards (in shares) | 132,681 | 216,542 |
Balance, end of period (in shares) | 13,121,163 | 12,988,482 |
Stockholders' Equity - Equity O
Stockholders' Equity - Equity Offering (Details) - USD ($) | 1 Months Ended | |
Jul. 31, 2017 | Sep. 13, 2016 | |
Maximum [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Shelf registration amount | $ 750,000,000 | |
Subsequent Event [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Proceeds from sale of stock | $ 114,600,000 | |
Remaining availability under shelf registration | $ 635,400,000 |
Net Income Per Common Share (De
Net Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 466 | $ 508 | $ 1,379 | $ 624 |
Weighted average Common Shares outstanding | ||||
Weighted average Common Shares outstanding (in shares) | 13,108,974 | 12,249,676 | 13,099,382 | 9,973,110 |
Unvested restricted stock (in shares) | (422,791) | (211,295) | (413,199) | (198,328) |
Weighted average Common Shares outstanding–Basic (in shares) | 12,686,183 | 12,038,381 | 12,686,183 | 9,774,782 |
Weighted average Common Shares outstanding–Basic (in shares) | 12,686,183 | 12,038,381 | 12,686,183 | 9,774,782 |
Dilutive effect of restricted stock (in shares) | 129,422 | 26,458 | 154,547 | 59,268 |
Weighted average Common Shares outstanding –Diluted (in shares) | 12,815,605 | 12,064,839 | 12,840,730 | 9,834,050 |
Basic Net Income per Common Share (in dollars per share) | $ 0.04 | $ 0.04 | $ 0.11 | $ 0.06 |
Diluted Net Income per Common Share (in dollars per share) | $ 0.04 | $ 0.04 | $ 0.11 | $ 0.06 |
Incentive Plan (Details)
Incentive Plan (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
2014 Incentive Plan [Member] | Restricted Common Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 0.3 | $ 0.1 | $ 0.7 | $ 0.3 |
Incentive Plan - Restricted Sto
Incentive Plan - Restricted Stock Activity (Details) - 2014 Incentive Plan [Member] - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Restricted Common Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Stock-based awards, beginning of period (in shares) | 419,070 | 203,471 | 302,299 | 85,757 |
Granted (in shares) | 15,910 | 21,424 | 132,681 | 139,138 |
Stock-based awards, end of period (in shares) | 434,980 | 224,895 | 434,980 | 224,895 |
Restricted Common Stock, Stock in Lieu of Compensation [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Granted (in shares) | 4,843 | 7,074 | 64,128 | 65,931 |
Restricted Common Stock, Stock Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Granted (in shares) | 11,067 | 14,350 | 68,553 | 73,207 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 07, 2017 | Jul. 26, 2017 | Jul. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 |
Subsequent Event [Line Items] | |||||||
Dividend declared (in dollars per share) | $ 0.39 | $ 0.38 | $ 0.7775 | $ 0.7575 | |||
Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Dividend declared (in dollars per share) | $ 0.3925 | ||||||
Proceeds from sale of stock | $ 114.6 | ||||||
Common Stock [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Proceeds from sale of stock | $ 108.9 | ||||||
Public Offering [Member] | Common Stock [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Shares issued in offering (in shares) | 4,887,500 | ||||||
Over-Allotment Option [Member] | Common Stock [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Shares issued in offering (in shares) | 637,500 | ||||||
Revolving Credit Facility [Member] | Line of Credit [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Extinguishment of debt | $ 58 |